The House of Lords has dismissed a final appeal by subcontractor Actionstrength Ltd (t/a Vital Resources) over the construction of a float-glass factory in Eggborough, Yorkshire.
The court has ruled that an oral agreement, upon which Actionstrength has based its claim, was unenforceable under section 4 of the Statute of Frauds Act 1677, which prohibits any action being taken to enforce the guarantee of a debt unless the guarantee is in writing and is signed.
Actionstrength had previously obtained an award of around £1.3m against the main contractor for the development, International Glass Engineering SpA (Inglen). Following that company’s insolvency, it sought to recover from factory owner Saint-Gobain Glass UK Ltd, claiming that Saint-Gobain had guaranteed payments owed by Inglen.
However, five law lords have unanimously backed the Court of Appeal decision to dismiss Actionstrength’s claim. They have held that, because no written guarantee was given by Saint-Gobain, and because Actionstrength relied only upon the strength of an alleged oral agreement, the claim must fail.
Actionstrength Ltd (t/a Vital Resources) v International Glass Engineering SpA and others House of Lords (Lord Bingham of Cornhill, Lord Woolf, Lord Hoffmann, Lord Clyde and Lord Walker of Gestingthorpe) 3 April 2003.
References: PLS 4/4/03
